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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Gary Taylor who wrote (11391)	12/30/2000 10:56:11 PM
From: marc ultra	Read Replies (2) \| Respond to of 42834

Gary re:QQQ, RYOCX and the wash rule. To me it's a no brainer. An exchange traded index fund and an indexed mutual fund that are both geared to the same index i.e. the NASDAQ 100 are substantially similar. That is why I didn't go for the 2beta RYVYX flavor of the NASDAQ 100 index fund either though at least the objectives are quite different. Talking about differences in how the mechanics of the funds work seems besides the point to me. The whole point of the wash rule IMO is that you can't take a loss without taking some risk of not maintaining a position that leaves you back in the substantially similar position you were in for the 61 day period. I think not using options to protect your sold position is agreed on and may even be in IRS Pub 550. If call options are considered substantially similar why would some mechanical difference in funds be considered a big deal? I know Pooba on the BB.com board seemed to take a position that would make the substantially similar loopholes big enough to drive a truck through. To me if I'm doing a move for tax purposes that is costing me some money and convenience then I at least want to make sure if I'm audited that I'm on solid ground as I have no desire to get a tax lawyer to argue case law or vague interpretations of IRS regs. As to the reality of your chances of getting audited and the auditor having a problem with the loss, that's a different issue. I felt that switching to an investment that was tied to a very different index, the Dow Jones technology sector by using IYW should give quite similar results based on my analysis while leaving me with no issues about the wash rule. That's the way I wanted to do it but a case can and is made by others for a less strict interpretation. One reason I was annoyed with the disappearing BB..com discussion was that I posted a major analysis on the performance with links and other issues with using IYW to get around the wash rule and the boards were gone the day after my post so nobody probably saw it. I had also hoped to refer back to it myself and didn't keep a copy. Marc